LOADS shifts focus to radiators, streamlines balance sheet

November 13, 2025 (MLN): Loads Limited (PSX: LOADS) is gearing up for an aggressive expansion in its aftermarket radiator segment, which management identified as a major growth driver for the coming years.

The company plans to focus on copper and brass radiators, targeting sales of 40,000 units in FY26, with volumes expected to double in subsequent years.

Radiators are projected to contribute nearly 15% to revenue in FY26, rising to around 30% in the following years, marking a meaningful diversification of the company’s product mix.

Meanwhile, LOADS is in discussions to divest its stake in Hi-Tech Alloy Wheels Limited (HAWL), as Expected Credit Losses (ECLs) have already been recorded.

The move is aimed at streamlining the balance sheet and enhancing liquidity, allowing the company to focus on its core manufacturing and expansion initiatives.

Management also highlighted that discussions with new OEM partners are underway, aligned with the government’s localization policy for auto parts, which could help LOADS secure fresh contracts and expand its market footprint.

Additionally, the company is evaluating aluminum radiator production to cater to both domestic and export markets, further broadening its product portfolio.

These developments were shared during LOADS’ FY25 corporate briefing session, where management reaffirmed confidence in the ongoing recovery of Pakistan’s auto sector, supported by stable exchange rates, improving economic indicators, and growing consumer demand.

During FY25, the company posted a topline of Rs6.0bn, up 34% year-on-year from Rs4.5bn in FY24, primarily driven by higher OEM volumes amid a rebound in the auto industry.

Net earnings stood at Rs495m (EPS: Rs1.97) compared to Rs827m (EPS: Rs3.29) in FY24, as pricing negotiations with OEMs affected profit margins.

In terms of the sales mix, mufflers contributed 61%, followed by sheet metal (35%) and radiators (4%). On the customer front, Pak Suzuki led with 55% of total sales, followed by Indus Motor Company (Toyota) at 24%, Honda at 14%, while the aftermarket, Yamaha, and others made up the remaining share.

To support its growth strategy, the company plans to raise Rs1.5bn through a rights issue of 120m shares at a maximum price of Rs12.50 per share.

The subscription process is expected to begin in January 2026 and conclude by February 2026. The proceeds will be used to meet working capital requirements and fuel expansion across both OEM and aftermarket segments.

Management expects automobile sales to increase by 20–25% in FY26, supported by economic stability, improved consumer sentiment, and the continuation of duty concessions under the Automotive Industry Development and Export Policy (AIDEP), which expires in June 2026.

The expiry of AIDEP is expected to push OEMs toward greater localization, benefitting parts manufacturers like LOADS.

On the Hi-Tech Alloy Wheels project, management confirmed that the plant is yet to be commissioned and requires an additional Rs2–3bn investment for completion. The company is considering either selling its stake or forming a joint venture (JV) to advance the project.

Management reaffirmed confidence in the ongoing recovery of Pakistan’s auto sector, citing stable exchange rates, improving macroeconomic indicators, and rising consumer demand as key growth drivers.

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